Posted on 08/27/2008 7:54:21 AM PDT by ZGuy
A U.S. appeals court Monday awarded nearly a dozen oil companies more than $1 billion to recover costs from breached 1980s exploration and production leases off the coast of California.
The U.S. Court of Appeals for the Federal Circuit affirmed a previous court's decision for the plaintiffs claiming the government owed them for the bonuses paid for the Outer Continental Shelf leases.
It may send a strong signal to congressional lawmakers who've been trying to force oil companies to pay royalties on offshore oil and gas leases signed in the late 1990s that omitted royalty relief provisions.
"It's very important to have reaffirmed the principle that when the government enters contracts with companies, it's held to the obligation either to fulfill those contractual obligations or pay damages if it doesn't," Steven Rosenbaum, a partner with Covington & Burling LP and counsel for the plaintiffs, told Dow Jones Newswires.
The plaintiffs include Amber Resources Co., Delta Petroleum Corp., Total SA, Plains Exploration and Production, Noble Energy, Anadarko E&P and Devon Energy Production. An official at the U.S. Department of Interior, which was responsible for the lease sales, said she couldn't immediately comment.
Between 1979 and 1984, the federal government granted around 35 leases to explore for and produce oil and natural gas off the California coast. But after a series of legal battles over the Coastal Zone Management Plan, the oil companies weren't able to use the leases, and they ultimately expired or were suspended by the government.
The court's Monday decision said nearly a dozen companies holding leases for the undeveloped tracts off Ventura, Santa Barbara and San Luis Obispo counties should be reimbursed for what they paid decades ago for the leases.
The court also confirmed a previous court ruling that denied plaintiffs' claims for damages attributable to possible income that may have come from developing the leases.
The government could appeal the decision for the case to be heard by the entire court panel - rather than the three judges who issued the current ruling - or appeal to the Supreme Court.
Asked if the case sends a message to Congress on lawmakers' attempts to force many oil companies to pay royalties on 1998-1999 leases in the Outer Continental Shelf in the Gulf of Mexico, Rosenbaum said: "This confirms that the government can't change the terms of the leases after they're issued."
The ruling comes as federal lawmakers and presidential candidates fight over energy policy, with Republicans pressing hard to open up more of the Outer Continental Shelf for exploration. Few industry analysts believe the California coast will come into play, but the case highlights one of the repercussions of the state's strong drive to block drilling off its coast.
The industry can point to this case as a good example of why not all leased properties in the US are under development.
"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus
Barack Obama’s coming to take it back and a whole lot more!
Wish we could make all of the Pelosicrat liberals in Congress pay this out of their own pockets until they are destitute — instead, all of the taxpayers will have to pay the costs of liberal malfeasance.
Ping
A billion of our tax money and not a single government employee will be held accountable or fired.
It is no wonder why none of them care.
oil ping
It’s very important to have reaffirmed the principle that when the government enters contracts with companies, it’s held to the obligation either to fulfill those contractual obligations or pay damages if it doesn’t,” Steven Rosenbaum, a partner with Covington & Burling LP and counsel for the plaintiffs, told Dow Jones Newswires.
Principle, schminciple... We’re talking about the federal government.
Somebody needs to point out that during the leasing process there are 11 points where litigation can enter. This helps out groups like the Environmental Defense Fund that states as it’s mission, ‘Not one drop of fossil fuel on American soil’.
Floozy Peloozy ain’t happy.
It is no wonder why none of them care.
The ones who perpetrated this are now safely retired with the full government benefit package and are now working "real jobs" for just enough time to cash in on Social Security as well.
Don't get me started on the incompetency of government workers (both state & federal) especially at the income tax dept. You couldn't find people any more ignorant (and rude!)!
I'd love a list of the names of the FedGov idiots who caused this...
L
This November, we, the voters, could hold them accountable by voting the RAT BUMS OUT!
LOL Bump. Hey Pelosi whats going on with those unused leases? Pay the oil companies their due.
Ping.
Extend the leases? Maybe- reset the "clock" on the extensions, to say, begin when the necessary permits to drill and develop are granted. That way, the gubermint isn't out the money, and the companies that hold rights which may hold promise, can either develop them,or sell the rights.
Admittedly, this approach could complicate things, in more ways than one, so not realy be "simple", at all.
Back to what actually has occurred; What most folks don't recall, is that there were actually a few exploratory wells drilled off of San Luis Obispo County, one of them as far North [approx.] as Diablo Canyon Nuclear Power Plant, near Pt. Buchon.
Now...were those wells any danged good? Did they find anything, or not? If not, and the oil companies that exercised their exploratory options, dropped pursuing those options further, due to lack of positive results --- as much or more than failing to get other "permissions" --- then does the gubermint really owe them 100% refund on the lease monies for those leases? I wonder how much that sort of reasoning was put forth by the mineral management folks.
Further offshore, on the Santa Lucia Bank, there were no exploratory wells drilled. Of that, I'm certain. But the oil companies were interested, I've gotten wind of.
Even deeper, off the Santa Lucia "Escarpment", where the bottom falls away in a hurry, to the Southwest of the S.L. Bank, is a feature we refer to as being "the donut". That one rises out of more than a thousand fathoms, (if memory serves) and peaks out in the mid-400's fathoms depth.
Take a look at oil & mineral maps for offshore of Texas. Just about every significant rockpile, has a hole poked in it. It got so bad (years ago), the Feds and others, went and made "Flower Garden Bank" off-limits to any more production. (pssst...there's no doubt some more oil, down under those rocks?)
Then there is the oil seep Southwest (and offshore) of Ragged Pt. Though oil is visible on the surface, it can be as much the smell as anything, that alerts one to the presence. If one is not ready for it, boating through the slick, the smell can cause a momentary panic attack.
---Ooh, no! an injector line has blown [again!] and I just know it's spraying all over the exhaust manifold! just like that other time! After which a guy comes to his senses, after that hasty dash to the engine room, and seeing no problem there, realizes, "wait, that ain't diesel i'm smelling, that be straight out crude". Oh, right. Duh.
Just think how many wells they could have sunk with what they had tied up in the uber-nanny state, California!! I'm sure Nazi Nan is not blameless in farce.
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